Palantir Technologies has created one of the most dramatic stories on Wall Street this year, defying conventional investment narratives. In 2025, it became the top-performing stock in the S&P 500, surging over 106% and at points climbing 144% from the start of the year—outpacing even AI heavyweights like Nvidia.

Palantir Technologies was the worst performer in the S&P 500 on Tuesday, with the stock continuing to surrender gains following a blowout earnings report earlier this month.

Palantir stock fell for the sixth straight session on Wednesday. With the retreat, Palantir stock is down 18% from its all-time high.

The sudden reversal shows how the hottest AI trade and top-performing stock of the year is colliding with a broader market rotation out of big tech.

Palantir shares tumbled Tuesday afternoon, extending recent losses as a high-profile short seller fueled worries the stock could be overvalued after a strong run earlier this year.

Palantir's price-to-sales ratio of 114 is way above OpenAI's 17. Palantir's success in defense work could block access to growth as enterprise AI payoff remains elusive